Internal Audit and its future

Internal Audit and its future

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Created By Admin Last Updated Mon, 23-Nov-2020

Internal Audits evaluates a company’s internal controls, including its corporate governance and accounting processes. These audits ensure compliance with laws and regulations and help to maintain accurate and timely financial reporting and data collection. The role of internal audit is to provide independent assurance that an organization’s risk management, internal control processes are operating effectively. It provides a number of important services to company management.

The internal auditors typically employees of the company perform the auditing and reported to the boards of directors and members of management. Internal audits typically smaller focused audits that (collectively over a year) will cover a broader range of scope. This allows the company’s board and management to get more frequent information that they may use to govern and improve the organization.

Types of internal audits-

·         Compliance audits (an independent evaluation to ensure that an organization is following external laws, rules, and regulations or internal guidelines).

·         Environmental audits (a type of evaluation intended to identify environmental compliance and management system implementation gaps, along with related corrective actions).

·          Information technology audits (it is the examination and evaluation of an organization’s information technology infrastructure, policies, and operation).

·          Operational audits (systematic review of effectiveness, efficiency, and economy of operation).

·          Performance audits (independent assessment of an entity’s operations, most often at all levels of the government. The goal is to evaluate the performance of state programs to determine their effectiveness and makes changes if needed).

Internal Auditing has a long history of successfully pivoting to meet the growing and changing needs of its stakeholders. The world is now entering the fourth industrial revolution where new technologies, digitalization, and artificial intelligence are dramatically changing the business landscape. 2021, being a pandemic year in the economy, provides vast opportunity in the internal audit industry. Since there are numerous changes happening around the globe and as data and technology are core of every aspect of the modern organization, IA departments can no longer work alone and must adapt to forthcoming changes. Following are the aspects that are going to bring a shift in IA function-

·         Internal Audit will play a key role in digital business transformation.

·         Internal Audit skills and expertise will expand.

·         Boards will become more involved in cyber security.

·         Privacy compliance will be a key focus for Internal Audit.

·         Third-party risk management will become a concern.

·         Increase coverage and frequency of testing across the audit universe.

·         Improve the efficiency of planning, testing, and reporting activities, creating more time for critical thinking activities.

·         More internal audit departments will use cyber security frameworks.

·         Third-party risk management will become a concern.